It looks like Greece will get its debt restructuring, which presumably delays its collapse by a few months. So now the spotlight shifts to the other functionally bankrupt eurozone countries which have no choice but to demand the same deal.

Portugal, by general consensus, is next in line. It hasn’t blatantly lied about its problems the way Greece has. And it hasn’t accumulated quite as much debt as Greece, though at 105% of GDP its government is still deep in the danger zone.

But it doesn’t export much and runs truly massive trade deficits. In order to pay down its debt it will need to generate trade surpluses going forward, but without the ability to devalue its currency to make exports cheaper, there’s no way to accomplish this.

So as with Greece, austerity leads to depression:

Bailed-out Portugal’s recession seen worsening
(AP) LISBON, Portugal — Portugal’s recession will deepen this year under the weight of austerity measures meant to reduce public debt, the bailed-out country’s central bank predicted Tuesday.

Portugal is trying to free itself from a huge debt burden that forced it to ask for a euro78 billion ($100 billion) financial rescue package last year to avoid bankruptcy.

But the Portuguese economy, one of the frailest among the 17 countries that use the euro as its currency, is buckling under the austerity cuts and fueling investor fears about the bloc’s chances of recovery from its two-year-old sovereign debt crisis.

The central bank said in a report it expects the economy to contract 3.1 percent this year. Last October, it forecast a 2.2 percent contraction in 2012.

As in bailed-out Greece, the government faces a dilemma as it tries to cut spending while at the same time fostering the growth it needs to settle its debts.

The jobless rate has climbed to a record 13.2 percent, and trade unions have staged strikes and protests against tax hikes and pay and welfare cuts.

Finance Minister Vitor Gaspar told lawmakers Tuesday he planned no new austerity measures this year. He said any funding shortfall would be made up through the sale of state property and gambling concessions.

Portugal went into a double-dip recession last year, contracting 1.6 percent, the central bank said. The economy will be “virtually stagnant” in 2013, it said.

The debt crisis has caused Portuguese living standards to drop, with the central bank estimating that disposable income would decline 11 percent between 2011 and 2013 — the duration of the bailout agreement.